Telstra needs a 'growth element'

It was an all too familiar tune for Telstra shareholders who attended Friday's annual meeting, with no immediate change expected in the phone giant's flat outlook despite signs of growth returning to the telecommunications industry.

Telstra chairman Bob Mansfield pointed out that Telstra's performance was better than its global peers, but admitted it was of little consequence for shareholders whose shares are still languishing below $5. Telstra, which gained 4c to finish at $4.82 on Friday, is well short of the $7.40 paid by many disgruntled shareholders as part of T2.

"The board acutely recognises that the share price position today is marginally improved from what it was 12 months ago," Mr Mansfield said. A "growth element" was needed to spark the stagnant share price and he put forward Telstra's plan to arrest 12 years of declining market share as its main option.

But shareholders showed more interest in past mistakes, like the disastrous Asian investments which they blamed for Telstra's present malaise.

Despite a $4.5 billion cash return in the form of dividends and a share buyback this calendar year, another $1 billion writedown of Telstra's investment with Pacific Century CyberWorks (PCCW) in March still rankled.

Renewed calls were made for board level resignations, and shareholders chided Telstra about the 15 per cent pay rise being sought by its directors, their first since 1999.

Mervyn Vogt, a shareholder who offered himself for election to the board, observed that constant job losses meant that Telstra workers were being asked to do more with less. "Maybe you should do the same with your directors," he said.

"I think we should be paying corn, because for the last three years we've been receiving turkeys," said another shareholder.

"I believe the only wise director on this board is Sam Chisholm because he doesn't own any Telstra shares," he added.

"There's no compulsion for you to own shares, if you chose not to do so," he said.

All resolutions were passed, including the directors remuneration increase.

Telstra expects to return to current industry growth levels of around 4 per cent with programs designed to stabilise market share and recover ground lost to the competition.

Telstra chief executive Ziggy Switkowski told the thousand-odd shareholders who attended the meeting at the Sydney Exhibition Centre that "Our goal is to return Telstra to annual profitable revenue growth approaching 4 per cent over the next two to three years".

He said Telstra was still losing market share with its revenue growth remaining "less than industry growth at present".

Telstra played down any expectation of a general pick-up in the telecom industry, despite Dr Switkowski's saying that "There is a sense that growth is returning slowly."

Despite Telstra's plans to hold its market share, most analysts expect the erosion to continue, with Telstra facing strong competition in mobiles, especially in the lead-up to Christmas.

A long-awaited wireless broadband competitor, Unwired Australia, emerged on Thursday, announcing a back-door listing, and $100 million capital raising that will fund a commercial roll-out in Sydney by the middle of next year.